The political leanings of a state judge overseeing a defamation lawsuit brought against Newsmax in Delaware ultimately convinced the company that it was better to settle the case rather than proceed with a jury trial, the outlet’s chief executive confirmed in an interview this week.
Speaking to prime-time host Greta van Susteren, Newsmax CEO Chris Ruddy said the company had deep reservations that Judge Eric Davis, a registered Democrat, would not oversee the case fairly based on his pre-trial comments and the outcome of a similar lawsuit involving Fox News Media.
Both cases were brought by Dominion Voting Systems, the manufacturer of voting machines that were used in some states during the 2020 presidential election. Commentators and guests on both Newsmax and Fox News questioned the validity of the election, which former President Joe Biden won after defeating incumbent President Donald Trump.
Earlier this week, Newsmax revealed Dominion accepted an offer to settle the case for $67 million — a fraction of the $787.5 million that Fox News paid to settle its legal case with Dominion two years ago. Dominion sought more than $1 billion in actual and punitive damages in both cases.
The settlement came about four months after Judge Davis granted Dominion partial summary judgment, during which he ruled that Newsmax’s broadcasts concerning the voting machine company likely met the burden of proof for defamation.
Specifically, Judge Davis took issue with Newsmax broadcasts, during which commentators and guests claimed that Dominion’s software had improperly cast votes for Biden by switching votes intended for Trump. Some Newsmax guests also claimed, without merit, that Dominion received kickbacks and bribes from Biden administration officials.
Judge Davis did not rule on whether Newsmax’s broadcasts amounted to “willful” and “wanton” disregard for the truth, saying it would be up for a jury to decide that matter and the appropriate amount of actual and punitive damages if those allegations were upheld.
Newsmax has always contended that it covered both sides of the election accurately and fairly. But the judge’s order ultimately convinced Ruddy that “the value of closing the case is better now than going through a whole case of litigation potential,” he said on Tuesday.
“This was not friendly territory for us, and the judge was very openly, brazenly biased,” Ruddy complained. “He effectively, I believe, enforced a confiscation of our money because he disagreed with our politics.”
Ruddy claims Judge Davis would not have allowed Newsmax to present “accurate and fair reporting” to a jury if the case proceeded to trial, something that couldn’t be substantiated in court records reviewed by The Desk.
“Judge Davis believed that he was lying from day one, and that we had no obligation or no right to tell the public this,” he contends.
The closing of the lawsuit resulted in a large financial blemish in what was otherwise a stellar second quarter (Q2) earnings report for Newsmax, which was released later than expected on account of the settlement.
On Tuesday, Newsmax said it earned $46.4 million in overall revenue, based largely on better cable ratings and renewed interest from TV advertisers. Revenue attributed to TV advertising comprised more than half of Newsmax’s earnings, clocking in at $29.9 million.
Based on generally-accepted accounting practices, or GAAP, Newsmax factored the Dominion settlement into its Q2 earnings report, and the company posted a $75.2 million net loss. By comparison, Newsmax lost $4.8 million during the same fiscal quarter last year, based on the company’s own reporting.
The agreement with Dominion was the second such settlement to involve Newsmax based on its post-election reporting and commentary. Last year, Newsmax agreed to settle a similar defamation lawsuit brought by Smartmatic for $40 million.
Fox News is currently being sued by Smartmatic on similar allegations of defamation. In April, attorneys for Fox News filed to have Smartmatic’s lawsuit dismissed.
